An Oregon woman was shocked and confused when she faced a lawsuit related to consumer debt. A debt of $2,100 showed up on her credit report, and she had no idea where it came from. To make matters more confusing, the debt contained outdated information. It listed her former address in California and a last name that she had not used in years. To this day, she says she has no idea where the debt came from but vigorously denies ever having made a purchase. She further states that the plaintiff in her lawsuit has refused to tell her what the debt is for. 

Creditors can file lawsuits over consumer debts, and when they do, defendants have very little recourse. In less than 10% of cases, debtors retain an attorney to fight the debt. In most cases, they do not show up to court, and a summary judgment is issued against them. In 70% of cases, default judgments are issued against defendants. At that point, an automatic lien is placed on their homes. Plaintiffs in these cases can garnish wages or levy bank accounts. 

The biggest problem for a defendant in a case like this is that attorney’s fees cost more than the value of the debt. Most attorneys will not take the case, placing defendants in the precarious position of representing themselves. 

Can I sue a company for false credit reporting?

Yes. In some cases, you may be able to sue a company for false credit reporting. However, you should challenge the information with the credit bureau prior to filing a civil lawsuit. Bad information can be listed on your credit report for a variety of different reasons. These can include misunderstandings and honest mistakes made by companies. That is no solace to those who have demands and lawsuits filed against them. If you send a credit dispute letter, the credit bureau must investigate the matter within a set period of time. If the credit bureau finds that the information cannot be verified, it is obligated to remove the information from your credit report.

If the creditor fails to comply with The Fair Credit Reporting Act, you may be entitled to file a lawsuit. The company can be fined anywhere from $100 to $1,000. In some cases, punitive damages may be awarded to a victim of a fictitious black mark on their credit report. In some cases, punitive damages may be awarded if the act was considered willful. 

If you believe that an errant account has been attached to your credit score, you should take the matter up with the credit bureau that is reporting the amount. If you do not believe you owe the money, you may have a right to file a lawsuit. 

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